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There was no economic reason to do this. The threat from a collapsed Anglo-Irish Bank, for instance, which had few depositors but a lot of ill-advised building projects financed by foreign speculators, “was not, by nature, systemic,” Lewis writes. “It became so only when its losses were made everyone’s.” Lewis contrasts Ireland’s predicament to that of Greece. In Greece, where legitimately elected government officials contracted the debt, the taxpayers have sought to wash their hands of it. In Ireland, where unaccountable private-sector moguls contracted the debt, the taxpayers have been saddled with it.

An even better contrast, though, is to Iceland, where speculative bankers poured money into crazy investments in much the same way that those in Ireland did. Iceland put its banks into receivership and promised to protect their depositors. But it threw the banks’ creditors to the wolves. In fact, it distinguished between domestic and foreign depositors and tried to throw the latter to the wolves, too. Britain and the Netherlands, where a good number of the Icelandic banks’ foreign depositors lived, paid off the depositors themselves, then used main force to back Iceland into a repayment agreement that will run​—​rather like war reparations​—​for at least three decades. The Icelandic banks’ bondholders, according to a recent Bloomberg report, wound up settling for 30 cents on the dollar.

More by Christopher Caldwell

The tens of billions that the next generation of Irishmen will pay for Fianna Fáil’s stupidity ought to destroy that party’s natural-majority status for a long time. Whether there is anything the opposition parties can do, once in power, to mitigate the damage is unclear, particularly since Ireland’s citizens (which is to say, its tax base) have begun to reacquire the age-old Irish habit of labor emigration. Right now, Ireland’s prospects for renegotiating its debt do not look any more promising than its prospects of paying it off. This does not mean that we will soon stop hearing calls for haircuts and interest-rate adjustments. They are useful to Irish budget discussions in the same way that invocations of “waste, fraud and abuse” are to our own​—​as a way to forestall, even for a few weeks, any talk about the descent into rage-inducing austerity that surely lies ahead.